CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:
We decrease our 12-month target price by $3 to $35, 5.8x our 2024 EPS estimate, a discount to CMA’s five-year forward P/E average of 11.5x given elevated funding pressure. We increase our 2023 EPS estimate by $0.16 to $7.79 and lower 2024’s by $0.09 to $6.02. CMA posted Q3 EPS of $1.84 versus $2.60 a year ago, $0.14 above consensus. Net interest income fell 3% Q/Q as the bank’s net interest margin compressed 9 bps to 2.84%. After six straight quarters of sequential deposit outflows, balances rebounded with 2% Q/Q growth. However, noninterest-bearing balances fell 5% and we expect continued pressure as clients continue to search for yield in today’s high-rate environment. Credit quality continued to impress with nonperforming assets falling 4 bps to 0.29%. Capital levels are also strong with the bank’s CET1 ratio rising 50 bps to 10.8%. However, rising rates drove CMA’s securities portfolio deeper underwater, creating further headwinds to CMA’s earnings capacity.